You are here: Home » Companies » News
Business Standard

Tata warns of bumpy ride for car makers

BS Reporter  |  Mumbai 

Tata Motors chairman says crisis in western Europe may dampen demand for passenger cars.

Ratan TataTata Motors Chairman Ratan Tata has warned of a challenging year ahead for car makers in India even as the automotive industry continues to grapple with diminishing demand.

“Looking ahead, I think the coming year will probably pose a considerable challenge. We all know western Europe is going through a relative crisis in terms of currency. All this is expected to dampen the demand for passenger cars,” Tata said while addressing shareholders at the company’s 66th annual general meeting here on Friday.

Sales of passenger cars of the company in the domestic market declined 10.7 per cent to 69,529 units during the first quarter of this financial year, as against 77,858 units a year ago. While commercial vehicles posted 13 per cent growth in sales in the first quarter, Tata cautioned any decrease in the government’s spending on infrastructure would impact their sales.

Tata also said the company should use the economic downturn as an opportunity to leverage low-cost manufacturing capabilities through design and manufacturing.

With increased presence of several international automotive in India, Tata said efforts were being made to protect its share in the domestic market.

“We need to also fill up the various product gaps that we may have. We are working on joint products with Jaguar and Land Rover and with Tata Daewoo”.

Tata Motors is looking to tap the extensive dealer base of JLR globally while exploring synergies with it. JLR currently serves 160 markets globally. Tata also assured the shareholders over the company’s loss-making joint venture (JV) with Italy’s Fiat, saying efforts were underway to turn around the operations.

“The JV was created with a certain set of assumptions. The assumption was basically that the JV would be to introduce Fiat products that we would market and we would produce products for ourselves,” Tata said.

“Those assumptions in terms of volumes did not work out, more so for Fiat than for us because there was a downturn and they made an assumption on planned demand which did not materialise. Both Fiat and we are relooking at the contractual undertaking. I hope we resolve this,” he added.

He said Tata Motors was looking to set up an vehicle assembly facility, especially for the Nano in Indonesia.

The company is looking to tap the potential demand base for the ultra compact car in the Southeast Asian market. In addition, it will set up an assembly base in Brazil to cater to the Latin American market.

Dear Reader,


Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

First Published: Sat, August 13 2011. 00:59 IST
RECOMMENDED FOR YOU
.